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Archive for the ‘Big Government’ Category

I wrote back in June that I was relieved about a bureaucrat from the National Weather Service getting elected to the Bureaucrat Hall of Fame.

I realize I was being jingoistic, but after selecting bureaucrats from France and India, I had been worried that foreigners were beginning to dominate the award.

But now Americans are on a roll. We have a new honoree, and she hails from one of those bureaucracies that shouldn’t exist – the Commerce Department in Washington.

Here are some remarkable excerpts from a report in the Washington Post.

A high-ranking official at the Commerce Department took at least seven government computers home, an IT smorgasbord from iPads to Dell desktops that she rarely used for work. And if that wasn’t enough, she allowed her kids to download pornography and “racially offensive materials,” an investigation found.

My main reaction is to ask why she was given seven computers. I realize that government bureaucracies waste money and have a callous disregard for taxpayer-provided equipment, but what possible rationale could there be for that many devices?

And my secondary thought is to wonder whether she “allowed” her kids to download inappropriate material or they did it behind her back.

If it’s the latter, then I’m not really sure why it matters. And I’m not even upset that she then tried to erase the info. I can understand why a parent would want to get rid of evidence that their kids were looking at porn.

When investigators started asking questions, they said, she tampered with evidence by erasing the offending material on some of the computers.

Though it’s far less excusable that she tried to penalize lower-level bureaucrats as part of her efforts to hide her misbehavior.

…and in retaliation moved to discipline a woman on her staff who cooperated with the probe.

If the information we’ve looked at was the extent of the matter, this bureaucrat wouldn’t be eligible for the Hall of Fame. However, she also engaged in other behaviors that make her a stellar candidate.

Including lavish trips with taxpayers picking up a big chunk of the cost.

This accumulation of misdeeds described by the Commerce Department watchdog in an investigative report released last week also included a layover in Paris en route to a European conference, partly funded by taxpayers. The official told colleagues her primary reason for going to the conference was to shop, the report said.

And she apparently didn’t think goofing off at her desk was a valuable use of her time, so she played hooky so she could goof off elsewhere.

Investigators said they also found a suspicious pattern of inconsistencies in when the official said she was working and what the swipe records on her security badge showed, including one day when she said she was on the clock for eight hours — but really worked just 20 minutes.

But here’s the clincher, the final piece of evidence that she belongs in the Bureaucrat Hall of Fame.

The statement doesn’t say whether the employee, a GS-15 on the federal pay scale, faces misconduct charges. She now works in another job at Commerce.

Isn’t that wonderful. Based on the GS-15 pay rules, she’s getting paid at least $125,000 per year (and perhaps as much as $158,000) and so far gets to keep her job notwithstanding serial misconduct.

A truly deserving candidate for the Hall of Fame!

P.S. I’ve previously written about America’s very quick and very successful recovery from a deep recession thanks to good fiscal policy in the early 1920s.

Writing for the New York Times, Ronald Radosh and Allis Radosh argue that the President during that time, Warren Harding, is mistreated by history. They start by noting Harding’s low ranking.

From the first poll of historians ranking the presidents, conducted in 1948 by Arthur M. Schlesinger Sr., to the most recent one in 2015, Harding has always come in either at the very bottom of the list, or one above James Buchanan.

They then point out that Harding took office during a grim period.

By the time Harding was inaugurated, in March 1921, the nation was in the doldrums, experiencing a postwar depression. In 1918, four million doughboys came home from the war and many could not find jobs. Unemployment hit African-American soldiers especially hard, and race riots broke out in the Midwest industrial belt. Harding, much like Ronald Reagan in 1980, brought an upbeat message to Americans.

And the part of that upbeat message that gets me juiced is smaller government.

A fiscal conservative, he pledged to right the nation’s finances and resuscitate the economy by lowering taxes, reducing the debt, balancing the budget and making government smaller and more efficient. …By…June 1922, the federal budget had been balanced, revenues exceeded expenditures and the public debt had been reduced. Spending had been $6.3 billion in 1920; by 1922 it had dropped to $3.3 billion.

Harding even had enough principles to reject politically popular spending bills. What a remarkable contrast with a recent Republican who was profligate with other people’s money.

Most telling was Harding’s veto of the popular so-called bonus bill, which would have given veterans an expensive bonus paid over time through deficit spending. The country, he told Congress in a speech, simply did not have the money. He argued it would also set a precedent to use public funds to pay for anything if it was “publicly appealing.”

And there were many other reasons to admire Harding. Unlike his predecessor, the notoriously racist Woodrow Wilson, he supported full equality and protection of the law for all Americans.

Harding immediately stressed his commitment to equal opportunity for all Americans, men and women, “whatever color, blood or creed.” …Harding was a racially enlightened president, especially for the time. During the campaign and his presidency, he supported an anti-lynching bill proposed by Republicans. …In October 1921, Harding traveled to Birmingham, Ala., where, in a powerful speech to a mixed-race (though segregated) audience, he demanded justice for African-Americans. In the first speech in the South by a sitting president on race, he argued for full economic and political rights for all African-Americans.

He also defended the rights of political minorities, again in contrast to Woodrow Wilson’s noxious actions.

Harding also stood out on civil liberties. On his first Christmas in office, Harding commuted the sentence of the Socialist Party leader Eugene V. Debs, who had been imprisoned under the Sedition Act under Wilson… Later, Harding commuted the sentences of the remaining political prisoners still incarcerated.

Pretty impressive.

I know that Reagan and Coolidge are the two best Presidents of the past 100 years, but I’ve never given much thought about who would be in third place. Seems like Harding might be the obvious choice.

Picking the bottom three would be harder because we’ve had so many bad Presidents. Wilson almost surely belongs on that list, but it would be tough to narrow down the list because FDR, Obama, Hoover, Carter, and Nixon would provide strong competition.

P.P.S. Returning to our original topic, here’s my collection of bureaucracy humor. I’ve targeted particular bureaucracies, such as the Postal Service,IRS, TSA, Department of Energy, and National Park Service.

We also have jokes about an Indian training for a government job, a slide show on how bureaucracies operate, a cartoon strip on bureaucratic incentives, a story on what would happen if Noah tried to build an Ark today, and a top-10 list of ways to tell if you work for the government.

There’s also a good one-liner from Craig Ferguson, along with some political cartoons from Michael Ramirez, Henry Payne, and Sean Delonas.

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Like Sisyphus pushing the rock up a hill, I keep trying to convince my leftist friends that growth is the best way to help the poor. I routinely share new evidence and provide real-world data in hopes that they will realize that good results are more important than good intentions.

In a triumph of hope over experience, let’s see once again if we can get the boulder to the top of the hill.

James Piereson of the Manhattan Institute has a superb article in Commentary about “The Redistribution Fallacy.” Here are some passages, starting with an observation that American voters are very skeptical about using government coercion to equalize incomes.

Public-opinion polls over the years have consistently shown that voters overwhelmingly reject programs of redistribution in favor of policies designed to promote overall economic growth and job creation. …While voters are worried about inequality, they are far more skeptical of the capacity of governments to do anything about it without making matters worse for everyone. …Leaving aside the morality of redistribution, the progressive case is based upon a significant fallacy. It assumes that the U.S. government is actually capable of redistributing income from the wealthy to the poor. …Whatever one may think of inequality, redistributive fiscal policies are unlikely to do much to reduce it, a point that the voters seem instinctively to understand.

Piereson points out that big changes in tax policy don’t have much impact, presumably because upper-income taxpayers take sensible and easy steps to protect themselves when they’re targeted by government, but they’re willing to earn and report a lot more income when they’re not being persecuted.

…there are perfectly obvious reasons on both the tax and the spending side as to why redistribution does not succeed in the American system—and probably cannot be made to succeed. …The highest marginal income-tax rate oscillated up and down throughout the 1979–2011 period. It began in 1979 at 70 percent during the Carter presidency. It fell first to 50 and then to 28 percent in the Reagan and Bush years. It rose to 39.6 percent in the 1990s under the Clinton presidency, and went down again to 35 percent from 2003 to 2010. It is now back up to 39.6 percent. The highest rate on capital gains moved within a narrower band, beginning at 28 percent in 1979 and falling as low as 15 percent from 2005 to 2011. The highest rate is currently 23.8 percent. Over this period, regardless of the tax rates, the top 1 percent of the income distribution lost between 1 and 2 percent of the income share after taxes were levied. …At the other end, the poorest quintiles gained almost nothing (about 1 percent on average) in income shares due to cash and in-kind transfers from government. In 2011, for example, the poorest 20 percent of households received 5 percent of (pre-tax) national income, and 6 percent of the after-tax income.

Moreover, it’s laughably inaccurate to claim that the United States doesn’t have a progressive tax system.

Many in the redistribution camp attribute this pattern to a lack of progressivity in the U.S. income-tax system; a higher rate of taxation on the wealthy should solve it, they think. …A 2008 study published by the Organization for Economic Cooperation and Development found that the United States had the most progressive income-tax system among all 24 OECD countries measured in terms of the share of the tax burden paid by the wealthiest households. …The top 20 percent of earners paid 93 percent of the federal income taxes in 2010 even though they claimed 52 percent of before-tax income. Meanwhile, the bottom 40 percent paid zero net income taxes—zero. For all practical purposes, those in the highest brackets already bear the overwhelming burden of federal income tax, while those below the median income have been taken out of the income-tax system altogether.

Indeed, it’s worth noting that the reason that government is much bigger in Europe is not because they tax the rich more, but rather because they have higher burdens on low- and moderate-income taxpayers (largely because of the value-added tax).

Simply stated, there aren’t enough rich people to finance a giant welfare state, particularly when they can easily choose to avoid confiscatory tax levels.

And this explains why honest American leftists occasionally will admit that they’re real goal is higher taxes on the middle class. That’s where the money is.

But I’m digressing. Let’s get back to Piereson’s article.

He also explains that redistribution doesn’t work on the spending side of the fiscal ledger.

Turning to the spending side of fiscal policy, we encounter a murkier situation because of the sheer number and complexity of federal spending programs. The House of Representatives Budget Committee estimated in 2012 that the federal government spent nearly $800 billion on 92 separate anti-poverty programs that provided cash assistance, medical care, housing assistance, food stamps, and tax credits to the poor and near-poor. …most of the money goes not to poor or near-poor households but to providers of services. The late Daniel Patrick Moynihan once tartly described this as “feeding the horses to feed the sparrows.” This country pays exorbitant fees to middle-class and upper-middle-class providers to deliver services to the poor. …This is one reason that five of the seven wealthiest counties in the nation are on the outskirts of Washington D.C. and that the average income for the District of Columbia’s top 5 percent of households exceeds $500,000, the highest among major American cities.

Gee, I’m shocked to learn that big government is a racket that lines the pockets of Washington insiders.

So what’s the bottom line?

The federal government is an effective engine for dispensing patronage, encouraging rent-seeking, and circulating money to important voting blocs and well-connected constituencies. It is not an effective engine for the redistribution of income. …those worried about inequality should abandon the failed cause of redistribution and turn their attention instead to broad-based economic growth as the only practical remedy for the sagging incomes of too many Americans.

Amen.

If you want an example of how statism hurts the less fortunate, look at what’s happened to Venezuela.

It used to be one of the richest nations in Latin America, but bad policies in recent decades have resulted in stagnation and deprivation.

Now, Venezuela is a basket case.

It’s so bad that even establishment media outlets can’t help but notice, as illustrated by this passage from an article in The Economist.

Though the poor initially benefited from “Bolivarian socialism”, economic mismanagement has made them poorer.

In other words, Venezuela is a real-world example of the famous parables about socialism in the classroom and buying beer with class-warfare taxation. Demagogic politicians don’t understand (or don’t care) that when you punish production and reward sloth, you get less of the former and more of the latter.

Which brings me back to Piereson’s concluding points. If you care about the poor, strive for more economic growth with policies based on free markets and small government.

Nations that follow that approach vastly out-perform the countries that choose statism.

That’s looking at the big picture. Now let’s look at an example that confirms Piereson’s point about redistribution programs mostly benefiting interest groups rather than poor people.

John Graham of the Independent Institute has a very sobering column about Medicaid in the Providence Journal. It turns out that record amounts of spending for the program doesn’t yield much benefit for poor people.

Medicaid is the largest means-tested welfare program in the United States.  …new research suggests that only 20 to 40 cents of each Medicaid dollar improves recipients’ welfare. …How much does Medicaid increase recipients’ actual welfare? In other words: Does $100 of Medicaid spending increase the dependent’s well-being by $100? More? Less? …recipients’ behavior indicates they only valued their benefits at one-fifth to two-fifths of the money spent is a serious indictment of the program.

So who does benefit from the program’s ever-growing fiscal burden?

Medicaid spending is driven by providers, especially hospitals, which have relentless lobbying operations. …The study group found that 60 percent of Medicaid spending comprises transfers to such providers

But here’s the most amazing conclusion from this new research.

Medicaid enrollment did not improve mortality or any physical health measure.

The only logical conclusion is that we need to reform Medicaid. Heck, let’s fix the entire mess created by the Washington-created welfare state.

It’s been bad for taxpayers and bad for poor people.

P.S. If you want to see sloppy and biased analysis (paid for with your tax dollars), take a look at efforts to rationalize that redistribution is good for growth from the International Monetary Fund and Organization for Economic Cooperation and Development.

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I’m not a huge fan of government bureaucrats.

But not because they’re bad people. Yes, there are repugnant hacks in the civil service like Lois Lerner, but most bureaucrats I’ve met are good people.

My objection is that they work for departments that shouldn’t exist (such as HUD, Education, Transportation, Agriculture, etc) and/or they are overcompensated relative to workers in the productive sector of the economy.

From an economic perspective, our nation would be more prosperous if this labor was freed up to generate wealth in the private sector.

But let’s not forget that we also have a giant shadow bureaucracy of people (sometimes referred to as “Beltway Bandits”) who get their income from government, but they’re not officially on the payroll because they work for consultants, contractors, grant recipients, and government-sponsored enterprises.

And this may be an even bigger problem. Iain Murray of the Competitive Enterprise Institute estimates that there are “five and a half ‘shadow’ government employees for every civil servant on the federal payroll.”

In an interview for Fox Business Network about the EPA-caused environmental disaster in Colorado, I took the opportunity to warn about the pernicious and self-serving role of these beltway bandits.

And I made similar points in this 2014 interview, which focused on how Washington is now the richest region in the country thanks to all the taxpayer money that’s being scooped up by this gilded class.

If you want a disgusting example of how taxpayers are victimized by consultants, contractors, and other beltway bandits, just recall the Obamacare websites that turned out to be complete disasters.

That led to some amusing cartoons about the failure of government-run healthcare, but it also should have resulted in outrage about the government giving fat payments for shoddy work.

And this highlights one of the chief differences between government and the private sector.

Since there’s no bottom-line pressure to be efficient in government, contractors, consultants, and other beltway bandits can stay in business in spite of poor performance. In the private sector, by contrast, both households and businesses will quickly sever relationships with people who don’t deliver good results.

Let’s cross the ocean and look at a story which nicely captures this dichotomy.

Here’s an excerpt from a column in the U.K.-based Telegraph, and it deals with an employee at a government-sponsored enterprise (GSE) who exposed fraud. In the private sector, such an employee would be rewarded. But at a GSE, which relies on subsidies and protection from competition, such an employee is treated like a leper.

An employee of France’s national rail operator SNCF has revealed being paid €5,000 (£3,550) per month to do absolutely “nothing” for 12 years, it emerged on Friday. …Charles Simon told French media that his employer, which runs France’s trains including the fast TGVs, took him off his day job in 2003 after he blew the whistle on a case of suspected fraud to the tune of €20 million. Since then he has received €5,000 per month net while staying at home with the status “available” for work.

Wow. If my math is right, that’s more than $66,000 per year for doing nothing. For 12 years!

Though at least Monsieur Simon is complaining about the situation, unlike the Indian bureaucrat who managed to get paid up until last year even though he stopped showing up for work back in 1990. Or the Italian government employee who only worked 15 days over a nine-year period.

P.S. Speaking of Beltway Bandits, that’s the name of my 55+ senior softball team and we just won the ISSA World Championship a couple of hours ago, prevailing 16-10 after falling behind 8-0.

And that was one week after we won the SSUSA Eastern National Championship.

And I also have to give a shout out to the Georgia Bulldogs of the Capital Alumni Network, which just won the championship of that 69-team league, becoming the first team in CAN history to be undefeated in the regular season and post-season tournament.

I’m disappointed I couldn’t be there for the celebration because of my other tournament. If I ever become a dictator, my first order will be that different softball tournaments can’t take place on the same weekend (and my second order will be to abolish my job and 90 percent of the rest of the government).

In any event, Go Dawgs! After winning the CAN tourney in 2012, this year’s dominating performance could signal the start of a dynasty.

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What’s the greatest economic tragedy in modern history?

The obvious answer is communism, which produced tens of millions of needless deaths and untold misery for ordinary people. Just compare living standards in North Korea and South Korea, or Chile and Cuba.

But if there was a second-place prize for the world’s biggest economic failure, Argentina would be a strong contender.

Here’s one fact that tells you everything you need to know. In 1946, when Juan Perón came to power, Argentina was one of the 10-richest nations in the world. Economic policy certainly wasn’t perfect, but government wasn’t overly large are markets generally were allowed to function. Combined with an abundance of natural resources, that enabled considerable prosperity.

But Perón decided to conduct an experiment in statism.

Here’s how Wikipedia describes his economic policy.

Campaigning among workers with promises of land, higher wages, and social security, he won a decisive victory in the 1946 presidential elections. Under Perón, the number of unionized workers expanded as he helped to establish the powerful General Confederation of Labor. Perón turned Argentina into a corporatist country in which powerful organized interest groups negotiated for positions and resources. …The state’s role in the economy increased, reflected in the increase in state-owned property, interventionism (including control of rents and prices) and higher levels of public inversion, mainly financed by the inflationary tax. The expansive macroeconomic policy, which aimed at the redistribution of wealth and the increase of spending to finance populist policies, led to inflation. …Perón erected a system of almost complete protection against imports, largely cutting off Argentina from the international market. In 1947, he announced his first Five-Year Plan based on growth of nationalized industries.

So were these policies successful?

Not exactly. In an article published last year, The Economist wrote about Argentina’s sad decline.

…its standing as one of the world’s most vibrant economies is a distant memory… Its income per head is now 43% of those same 16 rich economies… After the second world war, when the rich world began its slow return to free trade with the negotiation of the General Agreement on Tariffs and Trade in 1947, Argentina had become a more closed economy—and it kept moving in that direction under Perón. An institution to control foreign trade was created in 1946; an existing policy of import substitution deepened; the share of trade as a percentage of GDP continued to fall. …As the urban, working-class population swelled, so did the constituency susceptible to Perón’s promise to support industry and strengthen workers’ rights. There have been periods of liberalisation since, but interventionism retains its allure.

The bottom line is that Perón was a disaster for his nation. Not only did he sabotage Argentina’s economy, he also apparently undermined the social capital of the country by somehow convincing a big chunk of the population that “Peronism” is an alluring economic philosophy.

Sadly, Pope Francis appears to be one of those people.

Here are some excerpts from a column in the New York Times.

The Economist recently called Francis “the Peronist Pope,” referring to his known sympathies for Argentina’s three-time president, Juan Perón. In the 1940s and ’50s, the populist general upended Argentina’s class structure by championing the country’s downtrodden. …“Neither Marxists nor Capitalists. Peronists!” was the chant of Perón’s supporters. And it was borrowing from the church’s political thinking that enabled Perón to found his “Third Way.” …It comes naturally, then, to Francis, who became a priest in Argentina’s politically engaged church hierarchy, to adopt a populist political tone… He speaks directly to the region’s poor with a fire found in the “liberation theology” that inspired South America’s leftist revolutionaries of the 1970s. …“If you were to read one of the sermons of the first fathers of the church, from the second or third centuries, about how you should treat the poor, you’d say it was Maoist or Trotskyist,” he said in 2010, when he was archbishop of Buenos Aires.

Pope Francis’ infatuation with statism is very unfortunate for a couple of reasons.

The obvious reason is that he is in a position of influence and he’s using that power to promote policies that will reduce prosperity. And poor people will be the biggest victims, as I explained in this BBC interview.

But there’s another problem with the Pope’s approach. Being charitable to the poor is supposed to be an act of free will, not the result of government coercion. Yet by making statements that – at the very least – are interpreted as supportive of a bigger welfare state, he’s taking free will out of the equation.

Libertarian Jesus” would not approve.

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I never watched That ’70s Show, but according to Wikipedia, the comedy program “addressed social issues of the 1970s.”

Assuming that’s true, they need a sequel that addresses economic issues of the 1970s. And the star of the program could be the Congressional Budget Office, a Capitol Hill bureaucracy that apparently still believes – notwithstanding all the evidence of recent decades – in the primitive Keynesian view that a larger burden of government spending is somehow good for economic growth and job creation.

I’ve previously written about CBO’s fairy-tale views on fiscal policy, but wondered whether a new GOP-appointed Director would make a difference. And I thought there were signs of progress in CBO’s recent analysis of the economic impact of Obamacare.

But the bureaucracy just released its estimates of what would happen if the spending caps in the Budget Control Act (BCA) were eviscerated to enable more federal spending. And CBO’s analysis was such a throwback to the 1970s that it should have been released by a guy in a leisure suit driving a Ford Pinto blaring disco music.

Here’s what the bureaucrats said would happen to spending if the BCA spending caps for 2016 and 2017 were eliminated.

According to CBO’s estimates, such an increase would raise total outlays above what is projected under current law by $53 billion in fiscal year 2016, $76 billion in fiscal year 2017, $30 billion in fiscal year 2018, and a cumulative $19 billion in later years.

And here’s CBO’s estimate of the economic impact of more Washington spending.

Over the course of calendar year 2016,…the spending changes would make real (inflation-adjusted) gross domestic product (GDP) 0.4 percent larger than projected under current law. They would also increase full-time-equivalent employment by 0.5 million. …the increase in federal spending would lead to more aggregate demand than under current law. …Over the course of calendar year 2017…CBO estimates that the spending changes would make real GDP 0.2 percent larger than projected under current law. They would also increase full-time-equivalent employment by 0.3 million.

Huh?

If Keynesian spending is so powerful and effective in theory, then why does it never work in reality? It didn’t work for Hoover and Roosevelt in the 1930s. It didn’t work for Nixon, Ford, and Carter in the 1970s. It didn’t work for Japan in the 1990s. And it hasn’t worked this century for either Bush or Obama. Or Russia and China.

And if Keynesianism is right, then why did the economy do better after the sequester when the Obama Administration said that automatic spending cuts would dampen growth?

To be fair, maybe CBO wasn’t actually embracing Keynesian primitivism. Perhaps the bureaucrats were simply making the point that there might be an adjustment period in the economy as labor and capital get reallocated to more productive uses.

I’m open to this type of analysis, as I wrote back in 2012.

…there are cases where the economy does hit a short-run speed bump when the public sector is pruned. Simply stated, there will be transitional costs when the burden of public spending is reduced. Only in economics textbooks is it possible to seamlessly and immediately reallocate resources.

But CBO doesn’t base its estimates on short-run readjustment costs. The references to “aggregate demand” show the bureaucracy’s work is based on unalloyed Keynesianism.

But only in the short run.

CBO’s anti-empirical faith in the magical powers of Keynesianism in the short run is matched by a knee-jerk belief that government borrowing is the main threat to the economy’s long-run performance.

…the resulting increases in federal deficits would, in the longer term, make the nation’s output and income lower than they would be otherwise.

Sigh. Red ink isn’t a good thing, but CBO is very misguided about the importance of deficits compared to other variables.

After all, if deficits really drive the economy, that implies we could maximize growth with 100 percent tax rates (or, if the Joint Committee on Taxation has learned from its mistakes, by setting tax rates at the revenue-maximizing level).

This obviously isn’t true. What really matters for long-run prosperity is limiting the size and scope of government. Once the growth-maximizing size of government is determined, then lawmakers should seek to finance that public sector with a tax system that minimizes penalties on work, saving, investment, risk-taking, and entrepreneurship.

Remarkably, even international bureaucracies such as the World Bank and European Central Bank seem to understand that big government stifles prosperity. But I won’t hold my breath waiting for the 1970s-oriented CBO to catch up with 21st-century research.

P.S. Here’s some humor about Keynesian economics.

P.P.S. If you want to be informed and entertained, here’s the famous video showing the Keynes v. Hayek rap contest, followed by the equally clever sequel, which features a boxing match between Keynes and Hayek. And even though it’s not the right time of year, here’s the satirical commercial for Keynesian Christmas carols.

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Let’s celebrate some good news.

When politicians can be convinced (or pressured) to exercise even a modest bit of spending restraint, it’s remarkably simple to get positive results.

Here’s some of what I wrote earlier this year.

…one of the few recent victories for fiscal responsibility was the 2011 Budget Control Act (BCA), which only was implemented because of a fight that year over the debt limit. At the time, the establishment was screaming and yelling about risky brinksmanship. But the net result is that the BCA ultimately resulted in the sequester, which was a huge victory that contributed to much better fiscal numbers between 2009-2014.

And “much better fiscal numbers” really are much better.

Here’s a chart I put together showing how the burden of federal spending declined between 2009 and 2014. And this happened for the simple reason that spending was flat and the economy had a bit of growth.

But now let’s look at some bad news.

It won’t surprise anyone to learn that the big spenders in Washington don’t like fiscal discipline.

They don’t like the modest restraint required by the Budget Control Act and they want to repeal or eviscerate the law. And they’ve already enjoyed some success, replacing spending restraint with tax hikes and budget gimmicks back in 2013.

And now there’s pressure for a similar capitulation this year, led by the Committee (gee, what a shocker) that’s in charge of spending money.

An article in Politico captures some of the internal dynamics.

…what should have been a dream job for House Appropriations Chairman Hal Rogers (R-Ky.) has instead become an exercise in frustration. Despite his plum position, Rogers finds himself at odds with GOP leadership… He’s calling for his party to raise strict spending caps he says are choking off necessary funding… But Rogers’ calls for a budget deal have fallen flat.

By the way, it’s not the main point of today’s column, but the article also shows why it was so important to eliminate “earmarks.”

Lawmakers no longer can be bribed to support more spending in exchange for pork-barrel projects.

It’s a reminder of the sway lost by the once powerful appropriations panel, in an age when earmarks are outlawed… The committee, once an aspiration for every lawmaker, is struggling to make its voice heard… appropriator Steve Womack (R-Ark.)…cheered Rogers for “pushing our leaders to the extent that he can” toward a budget accord. “Appropriators are in a tough spot … We just don’t have the grease that we formerly possessed.”

Good. I don’t want big spenders to have “grease” that facilitates a bigger burden of government.

But getting rid of earmarks didn’t win the war. Washington is still filled with lobbyists, bureaucrats, cronies, special interests, and other insiders who want more spending.

They want to bust the spending caps so they can line their pockets at the expense of the American people. Which is why maintaining the BCA caps are a critical test of whether Republicans are sincere about controlling Leviathan.

To understand the importance of the spending caps, here’s a chart from the Center on Budget and Policy Priorities, a left-wing group that supports bigger government. I won’t vouch for their specific numbers since they have an incentive to exaggerate and overstate the amount of fiscal discipline that’s been imposed, but there’s no question that the big spenders have been handcuffed in recent years.

Now that we’ve reviewed why it’s important to have spending caps, let’s talk about the elephant in the room.

There are two reasons why Republicans may sell out. First, as already discussed, some of them are spendaholics. They like bribing voters with other people’s money.

The second reason the GOP may capitulate is that the President and congressional Democrats may force a “government shutdown” fight.

To be more specific, the annual spending (or “appropriations”) bills are supposed to be completed by October 1, which is the start of the new fiscal year.

If President Obama uses his veto pen, which is what most observers expect, there will be a shutdown. And even though previous shutdowns have yielded positive policy changes, Republicans are afraid that they will suffer political blowback.

Given that they won a landslide election in 2014 after the 2013 shutdown (and also prevailed after the 1995 shutdown fight), this skittishness is a bit of a mystery, but the conventional wisdom is that GOPers will capitulate to Obama and agree to a deal that busts the spending caps.

Which would be very unfortunate for the cause of good fiscal policy.

On the issue of big government and spending discipline, I recently appeared on John Stossel’s show, along with my colleague Chris Edwards, while participating in FreedomFest. Here’s what we said about the importance of shrinking Washington to promote freedom and prosperity.

P.S. In this video, Chris and I pontificate at greater length on fiscal policy issues.

P.P.S. While I’m critical of the politicians on the Appropriations Committee, I don’t think they’re necessarily any worse than other lawmakers. As I explained last month when analyzing the bad behavior of politicians who are on the committees that deal with transportation, the system creates a perverse incentive structure to expand government.

P.P.P.S. Here’s some government shutdown humor. And some more at the bottom of this post.

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For both policy reasons and narcissism, I wish the most popular item ever posted on International Liberty was Mitchell’s Golden Rule.

But that guide to sensible fiscal policy isn’t even in the top 70.

Welfare State Wagon CartoonsInstead, my most-read post is a set of cartoons showing how the welfare state inevitably metastasizes as more and more people are lured into the wagon of government dependency.

I suspect these cartoons are popular because they succinctly capture and express a concern that is instinctively felt by many people.

But instinct isn’t the same as evidence.

So I’ve shared various estimates of America’s growing dependency problem, though I’ve also warned that these numbers don’t necessarily tell the full story.

Given my dissatisfaction with the current estimates, I was very interested to see a new attempt to measure the degree to which nations are undermined by ever-expanding redistribution. Writing for the Mises Institute and using Greece as an example, Justin Murray analyzes the dependency problem.

…without understanding how Greece got into this problem in the first place and identifying the root cause of an over-indebted society, any plan or solution has a high probability of failure. …Greece, being a nation with a high tax rate on production and a high subsidy rate on public assistance, will generate a population that finds greater preference toward public assistance and away from productive labor.

Mr. Murray puts together a new statistic called “implied public reliance,” which is designed to measure how many strangers each worker is supporting.

…we must identify a nation’s currently employed population. Next, all public sector employees are removed to obtain an adjusted productive workforce. …this productive population is divided into the nation’s total population to identify the total number of individuals a worker is expected to support in his country. …the average household size is subtracted from this result to get the final number of individuals that an individual must support that are not part of their own voluntary household. In other words, how many total strangers is this individual providing for? …Greece…is currently expecting each employed person to support 6.1 other people above and beyond their own families.

And here’s a chart from his article, showing the IPR measures for 18 countries.

I’m not surprised that Greece has the worst IPR number, and it’s also no surprise that nations such as Italy and France do poorly.

Though I am surprised that Canada scores so highly. And Denmark’s decent performance doesn’t make sense considering the data I shared a few months ago.

Mr. Murray then looks at this data from a different perspective.

To demonstrate how difficult it is to change these systems within a democratic society, we just have to look at the percentage of the population that is reliant on public subsidy.

And here are those numbers.

Wow. It’s hard to be optimistic after looking at these shocking numbers.

Moreover, I suspect we’ll remain pessimistic even if Mr. Murray’s initial numbers are revised as he refines his methodology.

And here’s the most depressing part of the analysis.

The numbers imply that 67 percent of the population of Greece is wholly reliant on the Greek government to provide their incomes. With such a commanding supermajority, changing this system with the democratic process is impossible as the 67 percent have strong incentives to continue to vote for the other 33 percent — and also foreign entities — to cover their living expenses.

From a public policy perspective, here’s the real challenge: How do you convince voters to back away from the public trough?

In my humble opinion, the only possible solution is to reject any and all bailouts and force Greece to balance its budget overnight. With luck, that may be such a sobering experience that the Greek people might learn that a society based on mooching and looting doesn’t work.

Not that I’m optimistic. Which is why I’ve been worried for more than five years that we’ll eventually see a loss of democracy in some European nations.

P.S. The second-most viewed post of all time is a parable about buying beer, which is actually a lesson about the dangers of so-called progressive taxation. And the third-most viewed post is a parable about applying socialist principles in a classroom, which is a lesson about the dangers about the dangers of redistribution.

P.P.S. On the topic of dependency, here’s what nursery tales would look like if they were written by statists.

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